Microsoft Stock Split Speculation Ignites as Price Hits Record High

Microsoft's last stock split was in February 2003, its ninth since going public in 1986. The software giant's shares have grown significantly since then, from around $25 to over $500. In contrast, peers like Nvidia, Broadcom, and Netflix announced 10-for-1 splits with their shares priced much higher than Microsoft's.

Microsoft's board rarely lets the share price go near its record close of $542 set last October, within about 5% of its current price. The company's stock has been above every previous split price for most of the past six years. If the old pattern still held, a split would have occurred long ago.

Microsoft's shares are now over three times their highest pre-split price in the 1990s. A 10-for-1 split like Nvidia's might send Microsoft close to the bottom of the Dow Jones Industrial Average, with a weight of about 0.6%. However, it's unlikely that a split will happen soon, as the board has let the shares trade above all previous split prices for most of the last six years.

The stock's price is around 30 times adjusted earnings, which some consider reasonable for a company that grew adjusted earnings per share by 22% last fiscal year. A small split, similar to Microsoft's past 2-for-1 splits, may be more likely if one occurs at all.